MUMBAI: Private equity firm Milestone Capital Advisors has acquired half of an IT park building in Kharadi business district of Pune for over Rs 160 crore.

Milestone has bought the south wing of E-Park, a part of Kharadi IT Park promoted by Maharashtra Industrial Development Corporation (MIDC). The building is next to EON IT Park and all of its 2.30 lakh sq ft office space is leased to multinational companies with periodic rental escalations.

Milestone has entered this transaction with an entry yield of around 9.5% to the property.

“This investment was made with a mix of debt and equity while our borrowing costs were much lower, thus generating a positive arbitrage of around 100 basis points,” Sandeep Chadha, partner at Milestone Capital Advisors, told ET.

This is Milestone’s second investment through its fourth private real estate investment trust (REIT), called Milestone Commercial Advantage Fund.

The north wing of E-Park is owned by Sunil Bharti Mittal-led telecom operator Bharti Airtel.

Milestone Commercial Advantage Fund made its first investment in June in The Capital, a commercial building in Mumbai’s Bandra-Kurla Complex.

The latest investment takes the fund’s total commitment in pre-leased assets in India to Rs 200 crore.

The fund, which is backed by institutions, high networth individuals and family offices, is looking to generate a yield of close to 20% on a gross level with this investment.

“We are evaluating and in the process of undertaking due diligence of other Mumbai and Bengaluru assets. These transactions are likely to be concluded soon as we are in advanced discussions with owners of those assets,” Chadha said.

He said the commercial real estate investment scenario in India continues to be buoyant and the fund is open to invest in sustainable value propositions. “Outlook is positive so far as our target investment segment of pre-leased commercial assets is concerned. ”In the first half of this year, there has been 50% more absorption in the industrial and warehousing sector, backed by strong macro-economic fundamentals. The average ticket size for offices has also increased from 50,000 sq ft to 65,000 sq ft. All in all, things are looking bright,” he said.

Milestone Capital plans to deploy around Rs 1,000 crore in pre-leased commercial assets through Milestone Commercial Advantage Fund over the next one year.

The PE player is looking to raise Rs 700 crore equity through this fund by end of March 2018.

Currently, the Goods and Services Tax (GST) is levied at 12 per cent on payments made for under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale.